More than microfinance: Financial literacy in India

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By Usha Gopinath

In the village of Sarai Kaji outside the city of Varanasi in Uttar Pradesh, India, Chanda lives with her husband and three kids. She and her husband farm to support their family, but it never seemed to be enough.

Like all parents, she wants a better life for her three children. Although she is illiterate, Chanda works hard so they may go to university and get the education she never had.

Starting a business with microfinance

Luckily, Chanda found Utkarsh Microfinance. She took out a loan to support the family’s farming. After paying that back successfully, Chanda got more ambitious: she took out a larger loan to start a small grocery store in her village. Business is good, and she’s currently working to pay that loan back.

But microfinance alone wasn’t enough. Chanda had a loan, but no business plan and no safety net. She was running their home and business with no budget. If she or someone in her family became ill, or their business had an unexpected emergency, they had no savings and no plan to get back on their feet. One small hiccup could wash away all of her hard work.

Enter MoneyPlan

In July of 2015, Chanda completed MoneyPlan, a financial literacy training program put on by Utkarsh, one of several local microfinance institutions working in collaboration with Accion across the country. The seven modules taught her how to create and manage a budget, how to save for emergencies and long-term goals, and about government services available to her, like life insurance. The program meets rural Indians where they are, literally and figuratively. The participants, the majority of whom are women, are able to attend trainings in their own village. Trainings are designed for those who are illiterate and have no prior financial knowledge, so MoneyPlan can reach those most in need.

Chanda is one of over 100,000 people, mostly women, throughout five states in India who have gone through the MoneyPlan program already. Eventually, MoneyPlan’s goal is to reach 250,000 people in rural India by 2017. Mass awareness campaigns help MoneyPlan reach even more people, using magic shows and trivia games to make financial literacy lessons entertaining and memorable, featuring repetition and testing to reaffirm the lessons learned.

Saving for the future

Since attending the MoneyPlan training, Chanda has made some serious changes. She has put her household and her business on a budget, tracking recurring, short-term, long-term and unexpected expenses. She has also begun saving 4,000 rupees a month, or about $60, for her family’s future. For the first time in her life, Chanda is planning for her advanced year, and putting money away for her children’s education.

With these measures in place, Chanda is planning for her family’s future and making her dream of educating her children come true.